Russia is looking towards Bitcoin as a payment form for energy exports

Russia is looking towards Bitcoin as a payment form for energy exports

By Sam Grant - min read
  • Energy official Pavel Zavalny says Russia has lost all interest in the Euro and dollar
  • On Wednesday, President Putin demanded that all unfriendlies must pay for Russian energy exports in the ruble

Recent reports suggest that Moscow is exploring ways to save its economy and get it back on track amidst heavy sanctions from the west. The country is now leveraging one of its most valuable exports – gas.

Russia already made it a requirement that all non-friendly nations seeking to buy gas from it must pay in the Russian ruble, while friendlies like China and Turkey can pay in their fiat currencies or the ruble.

Bitcoin as an option for the 'allies'

According to a top government official, the nation is open to accepting Bitcoin as payment for oil and gas exports. Chairman of the State Duma Committee on Energy Pavel Zavalny announced the new crypto payment alternative in a press conference on Thursday.

He, however, indicated that this provision would be for the 'friendly' countries.

"When it comes to our 'friendly' countries, like China or Turkey, which don't pressure us, then we have been offering them for a while to switch payments to national currencies, like rubles and yuan. With Turkey, it can be lira and rubles. So, there can be a variety of currencies, and that's a standard practice. If they want bitcoin, we will trade in bitcoin," Zavalny said, according to a translation of his comments.

Moscow is keen to stay away from the US dollar and Euro currencies, which it now considers 'unusable'. Zavalny was in agreement with President Putin's decision to demand that all "unfriendly countries" pay for natural gas in the ruble or hard money (gold) since Russia can't trade in the "candy wrapper" EUR and USD.

Notably, after Putin made the Wednesday announcement on the ruble, gas prices across Europe rose 30%.

"If we can't store [the Euro], acquire it, if the ability to settle in this currency with our counterparties, including those in Western Europe, is violated, then why should we trade for this currency?" Zavalny questioned. "For us, this currency turns into candy wrappers. We have lost all interest in euros and dollars."

What all this means for Bitcoin

Last October, Putin told CNBC's Hadley Gamble that though he believed Bitcoin has value,  it could not be used to complete oil trades. However, current circumstances could have pushed him to have a change of heart.

On the other hand, the US, which has already banned the import of gas and gas products from Russia., has not imposed any secondary sanctions to parties still dealing with Russia for the said products. Should the Bitcoin route turn feasible, it could be a new dawn for cross-border payments for nations worldwide.